The Vulnerable 20 Group of Finance Ministers (V20) yesterday highlighted mounting pressures to their economies amidst growing costs from worsening climate disasters and the Covid-19 pandemic during the inaugural of Global Climate Adaptation Summit.
The V20 is seeking support for new climate investments to exceed the low-bar $100 billion target for international climate finance that the group can deploy for adaptation, low- carbon infrastructure and resilience projects in their respective economies, said a press release.
“The world economy is at a historic crossroads. Covid-19 has shown the inadequacy in our preparation. We cannot allow such an occurrence to repeat in regards to climate change impairment,” said Bangladesh Finance Minister AHM Mustafa Kamal, who is also a member of the V20.
Kamal said, “If we combine our persistent endeavors, certainly we can overcome this impairment and become far more active in constructing a resilient global economy together. We have to accept that the global response has been too little, too late. We must absolutely see all donors balance their climate finance and place adaptation on a level footing with reducing emissions,”
While the Covid-19 pandemic has sparked a new sense of urgency to build better infrastructure and social protections, the V20 group is concerned that availability of capital for climate action still fall short of requirements to achieve the 1.5°C threshold of the Paris Climate Agreement.
Since the agreement took effect, it became clear that growing exposure to climate risks creates instability in the world economy given that V20 countries are engines of global growth with consistently high average rates of economic expansion exceeding 5 percent per year.
The release said that every economy should review all macro signals for the full range of climate risks. IMF surveillance should endeavor to monitor climate risks globally. Moreover, financial protection against climate and disaster risks is almost non-existent among most vulnerable communities.
International support can develop financial protection such as the V20-led Sustainable Insurance Facility, which is part of the InsuResilience Global Partnership target, to reach sufficient market scale for insurance and related industries.
Aiyaz Sayed-Khaiyum, Attorney-General and Minister for Economy of Fiji and member of the V20 added, “We echo the call of our V20 counterparts for an Accelerated Finance Mechanism to enable off-balance sheet de-risking tools to reduce the cost of capital of adaptation and renewable energy solutions.”
“The response to this pandemic can mark a turning point to the vulnerable world with real change that delivers real resilience, gains in well-being and sustainable development.” added the Fijian Minister.
Last month, the group released its Climate Prosperity Plans program under the Bangladesh Presidency. These national plans will outline strategic investment frameworks to mobilize international financing for implementing renewable energy, adaptation and resilience projects.
The Climate Prosperity Plans also include an analysis of jobs created, cost savings are a result of disaster reduction, opportunities for foreign direct investments as well as economic and social benefits that can be realized if international climate finance is made available.
Formed in 2015, the V20 Group of Finance Ministers is a dedicated cooperation initiative of economies systematically vulnerable to climate change.
It is currently chaired by the People’s Republic of Bangladesh. The V20 membership stands at 48 economies including Afghanistan, Bangladesh, Barbados, Bhutan, Burkina Faso, Cambodia, Colombia, Comoros, Costa Rica, Democratic Republic of the Congo, Dominican Republic, Ethiopia, Fiji, The Gambia, Ghana, Grenada, Guatemala, Haiti, Honduras, Kenya.
The V20 member countries also include Kiribati, Lebanon, Madagascar, Malawi, Maldives, Marshall Islands, Mongolia, Morocco, Nepal, Niger, Palau, Palestine, Papua New Guinea, Philippines, Rwanda, Saint Lucia, Samoa, Senegal, South Sudan, Sri Lanka, Sudan, Tanzania, Timor-Leste, Tunisia, Tuvalu, Vanuatu, Vietnam and Yemen.